News Corp, the media conglomerate controlled by Rupert Murdoch, has withdrawn its bid to purchase the Long Island paper Newsday, a News Corp spokeswoman said on Saturday.
The decision to revoke the offer came just days after Murdoch confidently predicted he would clinch a deal to buy the newspaper within a week.
News Corp had offered about US$580 million for the daily newspaper, one of the country’s biggest, but it was competing against rival bids from Cablevision Systems Corp and New York Daily News owner Mortimer Zuckerman. Cablevision had reportedly made an offer of US$650 million for the paper, now owned by the Tribune Co.
News Corp spokeswoman Teri Everett didn’t immediately elaborate on why the company revoked its earlier offer, but she hinted at the potentially higher price tag, saying, “It became uneconomical for us to continue.”
Murdoch had indicated earlier that he wouldn’t raise his bid.
“Of course, they’re overpaying,” said John Morton, an independent newspaper industry analyst in Silver Spring, Maryland, in a telephone interview. “Murdoch was overpaying. If somebody didn’t have a hometown interest, this paper would’ve sold for US$400 million to US$450 million, possibly US$500 million.”
A deal would have made News Corp an even bigger giant in New York media. The company already owns the Wall Street Journal and the New York Post, plus two area television stations. News Corp’s purchase of Newsday would have triggered a review by the US Federal Communications Commission, which enforces restrictions on common ownership of daily newspapers and broadcast stations in the same market.
A spokesman for the Tribune Co, Gary Weitman, declined to comment on News Corp’s withdrawal or the status of the negotiations with other bidders.
The Tribune Co, led by real estate magnate Sam Zell, had appeared to be close to selling Murdoch both Newsday and the commuter paper am NewYork until Cablevision entered the fray.
Murdoch said on Wednesday in a conference call with reporters that negotiations were in a “pretty advanced stage” and that a deal was imminent, despite the higher Cablevision offer.
“We think everything’s in hand,” he said.
Cablevision has declined to discuss its interest in Newsday, and a spokesman said the company wouldn’t comment on News Corp’s withdrawal from the bidding. A spokesman for Zuckerman also declined to comment.
The withdrawal of the deep-pocketed Murdoch appears to leave Cablevision as the most likely buyer of Newsday. Cablevision’s primary business is in cable television systems, but it also owns Madison Square Garden and the New York Knicks and Rangers. The company has never operated a newspaper.